EXHIBIT 10Z
STOCK PURCHASE AGREEMENT
This STOCK PURCHASE AGREEMENT (the "Agreement") dated as of October 28,
1996 by and between Xxxxxxxx X. Xxxxxx, D.O., (the "Seller"), Xxxxx X. Xxxxxx,
M.D. P.C., a California corporation with an office at 000 Xxxx Xxx Xxxx
Xxxxxxxxx, Xxxxx 0000, Xxxx Xxxxxxxxxx, XX 00000, (the "Purchaser") and HEALTH
PROFESSIONALS, INC. (hereinafter referred to as "HPI"), a Delaware corporation,
with an office at 000 Xxxx Xxx Xxxx Xxxxxxxxx, Xxxxx 0000, Xxxx Xxxxxxxxxx, XX
00000, (the "GUARANTOR").
R E C I T A L S:
WHEREAS, Seller owns 100% (100 shares of the authorized for issuance
amount of 7,500) of the issued and outstanding shares of Xx. Xxxxxxxx X. Xxxxxx,
Inc., a professional corporation (hereinafter the "PC") which owns and operates
a medical practice with offices in Beverly Hills, California; and
WHEREAS, Purchaser desires to purchase and the Seller desires to sell to
Purchaser all of the shares of stock in the PC; and
WHEREAS, the parties have agreed to the terms and conditions under which
Seller shall sell and Purchaser shall purchase the shares of stock of the PC;
NOW, THEREFORE, in consideration of the mutual covenants, agreements,
representations and warranties contained in this Agreement, the parties hereto
agree as follows:
1. PURCHASE OF STOCK.
1.1 SALE AND PURCHASE. Subject to the terms and conditions set forth
in this Agreement, Seller agrees to sell and deliver to the Purchaser and the
Purchaser agrees to purchase from the Seller at the "Closing", hereinafter
defined, 100% of the issued and outstanding shares of stock of PC. The parties
agree that prior to closing, the PC shall distribute to Seller individually, all
of the cash on hand as of October 28, 1996 and the Accounts Receivable of the PC
for medical and ancillary services rendered prior to October 28, 1996.
1.2 PURCHASE PRICE. In consideration for the sale of the Stock and
the services to be rendered during the "Transition Period" as described below,
the Purchaser agrees to deliver to Xxxxxxxx X. Xxxxxx, D.O. 168,000 unregistered
shares of the common stock of Health Professionals, Inc. (the "HPI Shares"), a
Delaware corporation, which, for purposes of this sale, have been valued at
$2.275 per share (the "Share Valuation Price").
1.3 GUARANTEE OF DELIVERY AND VALUATION OF SHARES.
Purchaser and Guarantor shall guarantee the delivery and the SHARE VALUA-
TION PRICE of the HPI Shares delivered to Xxxxxxxx X. Xxxxxx, D.O. for a period
of five trading days from, the later of the date said shares are first eligible
for sale under Rule 144 or two years from October 28, 1996 (the "GUARANTEE
PERIOD"), to the extent that, if during the GUARANTEE PERIOD the market price of
the HPI Shares delivered to Xxxxxxxx X. Xxxxxx, D.O. is lower than $2.275 (the
GUARANTEED PRICE), then Purchaser and Guarantor shall pay Xxxxxxxx X. Xxxxxx,
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D.O. the difference between the average market price at the close of business of
the five days constituting the GUARANTEE PERIOD and the GUARANTEED PRICE in
additional shares of HPI stock so that the market value of the HPI shares
received by Seller in payment of the purchase price is no less than $2.275 per
share. The parties agree that HPI's obligation under the Guarantee shall be
limited to the issuance of 160,000 additional shares. This Guarantee is personal
to Seller and is not assignable to any third party.
2. TRANSITION OF PATIENTS. During the period between October 28, 1996
and February 1, 1997, Seller shall aid and assist Purchaser in transitioning the
PC's patients to Purchaser. Seller shall be available during normal business
hours and shall continue to treat patients as is necessary. Seller shall not be
obligated to work weekends or evenings, shall not be on call during this period,
can be on vacation Thursday, November 28 through Monday, December 2, 1996 and
will have two (2) additional business days off between Christmas and New Years
Day. Seller will receive no compensation except his out-of-pocket costs will be
paid, for example, monthly parking at the office building and E&O insurance
premiums for the duration of transition period. Xxxxxxxx X. Xxxxxx, D.O. shall
not receive any consideration for services rendered during the transition
period.
3. REPRESENTATIONS AND WARRANTIES OF THE SELLER. Seller makes the
following representations and warranties in order to induce Purchaser to
purchase the shares in the PC. It is intended that these representations and
warranties survive the closing.
3.1 ORGANIZATION AND STANDING OF THE SELLER. PC is a professional
corporation rendering medical services duly organized, validly existing and in
good standing under the laws of the State of California, and except as set forth
below, has clear title to the assets other than as set forth below and is
entitled to sell said assets.
3.2 AUTHORITY OF THE SELLER; CONSENTS; EXECUTION OF AGREEMENTS. The
Seller has all requisite power, authority, and capacity to enter into this
Agreement and to perform the transactions and obligations to be performed by it
hereunder. No consent, authorization, approval, license, permit or order of, or
filing with, any person or governmental authority is required in connection with
the execution of the transactions and obligations to be performed by it
hereunder. The execution and delivery of this Agreement, and the performance of
the transactions and obligations contemplated hereby by the Seller, have been
duly authorized by all requisite action of the Seller. This Agreement has been
duly executed and delivered by the Seller and constitutes a valid and legally
binding obligation of the Seller, enforceable in accordance with its terms,
except as enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws.
3.3 TITLE TO ASSETS/LIPC is the owner of the assets set forth in Schedule
A annexed hereto and shall have clear and unencumbered title to the assets on
the date of closing, except as set forth below.
4. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER.
Purchaser makes the following representations and warranties in order to induce
Seller to sell the shares in the PC. It is intended that these representations
and warranties survive the closing.
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4.1 The Purchaser is a duly and properly formed corporation under
the laws of the State of California.
4.2 The Purchaser has all requisite power, authority, and capacity
to enter into this Agreement and to perform the transactions and obligations to
be performed by it hereunder.
4.3 No consent, authorization, approval, license, permit or order
of, or filing with, any person or governmental authority is required in
connection with the execution of the transactions and obligations to be
performed by it hereunder. The execution and delivery of this Agreement, and the
performance of the transactions and obligations contemplated hereby by the
Purchaser, have been duly authorized by all requisite action of the Purchaser.
This Agreement has been duly executed and delivered by the Purchaser and
constitutes a valid and legally binding obligation of the Purchaser, enforceable
in accordance with its terms, except as enforcement thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws.
5. REPRESENTATIONS AND WARRANTIES OF GUARANTOR.
5.1 The Guarantor is a duly and properly formed corporation under
the laws of the State of Delaware.
5.2 The Guarantor has all requisite power, authority, and capacity
to enter into this Agreement and to perform the transactions and obligations to
be performed by it hereunder.
5.3 No consent, authorization, approval, license, permit or order
of, or filing with, any person or governmental authority is required in
connection with the execution of the transactions and obligations to be
performed by it hereunder. The execution and delivery of this Agreement, and the
performance of the transactions and obligations contemplated hereby by the
Guarantor, have been duly authorized by all requisite action of the Guarantor.
This Agreement has been duly executed and delivered by the Guarantor and
constitutes a valid and legally binding obligation of the Guarantor, enforceable
in accordance with its terms, except as enforcement thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws.
6. ASSIGNMENT OF LEASES.
6.1 Seller is presently the Tenant under that certain Office
Building Lease with Xxxxxxxx Enterprises, dated April 14, 1992. At closing,
Seller shall assign said lease to Purchaser and Purchaser shall assume said
lease and indemnify and hold Seller harmless from its obligations on said lease
accruing after October 28, 1996.
6.2 Seller is presently under lease with Xxxxxxx Microlift 16 (CBC
machine) through January, 1998. At closing, Seller shall assign said lease to
Purchaser and Purchaser shall assume said lease and indemnify and hold Seller
harmless from its obligations on said lease accruing after October 28, 1996.
6.3 Seller is presently under lease with Pitney Xxxxx for a stamp
machine. At closing, Seller shall assign said lease to Purchaser and Purchaser
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shall assume said lease and indemnify and hold Seller harmless from its
obligations on said lease accruing after October 28, 1996.
6.4 Seller is presently under lease with the County of Los Angeles
Art Museum rental program. At closing, Seller shall assign said lease to
Purchaser and Purchaser shall assume said lease and indemnify and hold Seller
harmless from its obligations on said lease accruing after October 28, 1996.
7. ASSUMPTION OF ACCOUNTS XXXXXXX.Xx or prior to closing, the Seller shall
execute an assumption and indemnity agreement with PC under which Seller shall
agree to pay all accrued but unpaid accounts payable of PC for the period ending
8:00 a.m., Monday, October 28, 1996. The PC shall remain responsible for all
accounts payable accruing after 8:00 a.m., Monday, October 28, 1996 and the PC
and the Purchaser shall indemnify, defend and hold the Seller harmless for all
of said accounts payable.
8. CLOSING AND CONDITION TO CLOSING.
8.1 CLOSING AND CLOSING DATE. The closing (the "Closing") shall take
place by mail and will be effective on the 28th day of October, 1996.
8.2 CONDITION TO CLOSING. The Closing shall be subject to
satisfaction of the condition that (a) the representations and warranties of (i)
the Seller contained in Section 3 hereof, (ii) the Purchaser contained in
Section 4 hereof and, (iii) the Guarantor contained in Section 5 hereof, are
true and correct and shall be true and correct as of the Closing Date; (b) the
Seller shall have delivered to the Purchaser and the Purchaser shall have
delivered to the Seller the items required by Sections 8.3 and 8.4 hereof; and
(c) the Purchaser and the Seller shall have performed and complied with all
agreements and conditions required by this Agreement to be performed and
complied with by such party prior to or as of the Closing Date.
8.3 DELIVERIES BY THE SELLER. At the Closing the Seller shall
deliver or cause to be delivered to the Purchaser 100% of the issued and
outstanding shares of PC and a stock power for transfer of said shares in form
annexed hereto as Exhibit "B" and the Assignment of Lease in the form annexed
hereto as Exhibit "C".
8.4 DELIVERIES BY THE PURCHASER. At the Closing, the Purchaser shall
deliver or cause to be delivered to the Seller a copy of instructions to the
transfer agent directing the issuance of the HPI SHARES to Xxxxxxxx X. Xxxxxx,
D.O. in the form annexed hereto as Exhibit "D".
9. COVENANT NOT TO COMPETE.
9.1 During the performance of the transition services and for a
period of two (2) years thereafter, Xxxxxxxx X. Xxxxxx, D.O. shall not, directly
or indirectly, (a) divert or attempt to divert any business or patients of
Purchaser to any other medical practice or research facility in competition with
CSI within the geographic area of Los Angeles County, California or (b) solicit
or induce employees of Purchaser to terminate their employment with Purchaser
and/or engage in any business in competition with the business carried on by
Purchaser.
9.2 Since a breach of the provisions of this Section 9 could not
adequately be compensated by money damages and will cause irreparable injury to
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Purchaser, Purchaser shall be entitled, in addition to any other right or remedy
available to it, to an injunction or restraining order restraining such breach
or a threatened breach, and no bond or other security shall be required in
connection therewith, and Employee hereby consents to the issuance of any such
injunction or restraining order. Xxxxxxxx X. Xxxxxx, D.O. agrees that the
provisions of Section 9 are reasonable and necessary to protect CSI and its
business. It is the desire and intent of the parties that the provisions of this
Section 9 shall be enforced to the fullest extent permitted under the public
policies and laws applied in each jurisdiction in which enforcement is sought.
If any restriction contained in this Section 9 shall be deemed to be invalid,
illegal or unenforceable by reason of the extent, duration or geographical scope
thereof, or otherwise, then the court making such determination shall have the
right to reduce such extent, duration, geographical scope or other provision
hereof and in its reduced form such restriction shall then be enforceable in the
manner contemplated hereby.
10. MISCELLANEOUS.
10.1 COSTS AND EXPENSES. Each party agrees to pay its own costs and
expenses in connection with the preparation, execution and delivery of this
Agreement and any other instruments and documents to be delivered hereunder.
10.2 LITIGATION COSTS. If any legal action or any other proceeding,
including arbitration or an action for declaratory relief, is brought for the
enforcement of this Agreement or because of an alleged dispute, breach, default,
or misrepresentation in connection with any provision of this Agreement, the
prevailing party shall be entitled to recover reasonable attorney's fees and
other costs incurred in that action or proceeding, in addition to any other
relief to which the prevailing party may be entitled.
10.3 FURTHER ASSURANCES. When requested to do so by a party, each
party shall execute, acknowledge, and deliver all further conveyances,
assignments, confirmations, satisfactions, releases, powers of attorney,
instruments of further assurance, approvals, consents, and all further
instruments and documents as may be necessary, expedient, or proper, in order to
complete all conveyances, transfers, sales, and assignments under this
Agreement, and to do all other acts and to execute, acknowledge, and deliver all
documents as requested in order to carry out the intent and purpose of this
Agreement.
10.4 ARBITRATION Any dispute under this agreement shall be
determined by arbitration under the Commercial Rules of American Arbitration
Association. Venue for any such arbitration shall take place in Los Angeles
County, California. Each party shall appoint one arbitrator and shall notify the
other party of such appointment in within thirty days after the written request
from the other party. The two arbitrators shall select a third arbitrator. The
written decision of a majority of the arbitrators shall be binding upon both
parties and enforceable at law or equity according to the laws of the State of
California. The arbitrators shall, by majority vote, determine the allocation of
the expenses of arbitration including costs and reasonable attorney's fees.
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10.5 WAIVERS AND AMENDMENTS. This Agreement may be amended or
modified in whole or in part only by a writing which makes reference to this
Agreement and is executed by the parties to this Agreement. The obligations of
any party hereunder may be waived (either generally or in a particular instance
and either retroactively or prospectively) only with the written consent of the
party claimed to have given the waiver; provided, however, that any waiver by
any party of any violation of, breach of, or default under any provision of this
Agreement or any other agreement provided for herein shall not be constructed
as, or constitute, a continuing waiver of such provision, or waiver of any other
violation of, breach of or default under any provision of this Agreement or any
other agreement provided for herein.
10.6 INVALIDITY. If any provision in this Agreement shall be
determined to be invalid, illegal or unenforceable, such provision shall not
effect any other provision hereof, and this Agreement shall be construed as if
such invalid, illegal or unenforceable provision had never been contained
herein.
10.7 GOVERNING LAW. This Agreement shall in all respects be governed
by and constructed in accordance with the laws of the State of California
without giving effect to the principles of conflicts of law thereof.
10.8 NOTICES. Any notice, request or other communication required or
permitted hereunder shall be in writing and be deemed to have been duly given if
personally delivered or five business days after being sent by recognized
overnight courier or confirmed facsimile to the parties at their respective
addresses set forth herein.
10.9 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, and all of which
together will constitute one and the same instrument.
10.10 SUCCESSORS AND ASSIGNS. Neither this Agreement, nor any of the
rights or obligations hereunder, shall be assigned by either party hereto
without the prior written consent of the other party hereto. This Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns.
10.11 EXHIBITS. The exhibits attached to this Agreement are
incorporated herein and shall be part of this Agreement for all purposes.
10.12 HEADINGS. The headings in this Agreement are solely for
convenience of reference and shall not be given any effect in the construction
or interpretation of this Agreement.
IN WITNESS WHEREOF, the parties have duly executed, or have caused their
duly authorized officer or representative to execute, this Stock Purchase
Agreement as of the date first above written.
SELLER:
________/S/___________________
Xxxxxxxx X. Xxxxxx, D.O.
PURCHASER:
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XXXXX X. XXXXXX, M.D. P.C., a
California corporation
By:________/S/_________________
Print: Xxxx X. Xxxxxx, M.D.
As Its: President
GUARANTOR:
HEALTH PROFESSIONALS, INC., a
Delaware corporation
By:______/S/__________________
Print: Xxxxxxx X. Xxxxxx, M.D.
As Its: President
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